After watching “tough” CCTV footage of the attack, he said it was “a montage, a film” and claimed that he did not recognise himself in the images.

The defendant said he had been using crack cocaine and LSD before his arrest, but had no memory of living in Tenerife.

Asked if he knew he was in Tenerife after being brought there from a psychiatric unit in Seville on the Spanish mainland, he said: “I have just found out.”

He also denied that he had lived in Wales, where he was sectioned in summer 2010 under the Mental Health Act at Glan Clwyd Hospital.

Deyanov has been diagnosed with acute paranoid schizophrenia.

Franciso Beltran, for the defence, told the jury his client was in “total disagreement” with the charge of murder against him.

“He has committed no crime, and it goes without saying that he has not committed the crime of murder,” Mr Beltran said.

He asked the jury see his client as a “sick man” who had been living on the streets without a diagnosis or treatment for his acute schizophrenia.

The jury were shown two 22cm-long (8.7 inches) “ham knives’, with one visibly bent and bloodied.

Prosecutor Angel Garcia Rodriguez told the court of the moment the frenzied attack took place.

Mr Garcia Rodriguez said: “The accused approached Jennifer Mills- Westley, whom he did not know and who was shopping, attacking and striking her repeatedly with a knife in her back and neck until she was completely decapitated.”

He said the prosecution was seeking for Deyanov to be sentenced to 20 years in a psychiatric unit.

Ms Mills-Westley’s daughters, Sarah Mills-Westley, 43, from Norwich, and Samantha Mills-Westley, 39, who lives in the Midi-Pyrenees region of France, looked visibly shaken as they attended the trial.

Also at the court were Jennifer Mills-Westley’s brother John Smith, 63, and sister-in-law, Julie Smith, 62.

As the jury was shown the CCTV footage, Samantha Mills-Westley covered her mouth in horror and stared into the distance.

Giving evidence later, Sarah Mills-Westley, who attended the court with her partner Brian Moore, 41, said: “All I want to see is justice done for my mum today.”

She explained that her mother had become worried about safety on the island before the attack.

“It was nothing specific but she was increasingly concerned that Tenerife was not as safe as when we used to visit 30 years ago.”

Witness Davide Balsamo, an Italian who has lived in Tenerife for five years, described the moment he stumbled on the horrific scene coming out of a hardware store.

He said: “I saw a guy walking around with a head in his hand.

“I came out of the shop and suddenly I saw him come off the curb, completely covered in blood.

“I ran up to him and hit him with all my strength using my motorcycle helmet and knocked him silly.”

Asked if the defendant was the man he had struck, he said “yes”, adding that his hair was a bit longer then.

Prosecutors are expected to ask for a sentence of 20 years in a mental asylum for Deyanov because he has chronic paranoid schizophrenia and the payment of €200,000 in compensation to the victim’s family.

Mills-Westley, originally from Norwich, England, had been living in Tenerife after retiring from her job as a road safety officer. She had no relation to Deyanov.

Deyanov was released from a hospital in Tenerife where he received psychiatric treatment just three months before Mills-Westley was killed, according to Spanish media reports.

In Jan 2011 he reportedly struck a security guard in the head with a rock, breaking several of his teeth. Tenerife is home to around one million residents and is one of Spain’s most popular tourist destinations.